When a community opens a large shopping mall, it often expects

Question

When a community opens a large shopping mall, it often expects a boost to the local economy, and in fact a large amount of economic activity goes on in these malls. Yet the increase in the local economy is typically much smaller than the total amount of economic activity that goes on in the mall.

Which one of the following, if true, most helps to explain the discrepancy described above?

Which one of the following, if true, most helps to explain the discrepancy described above?

(A) When large shopping malls are new they attract a lot of shoppers but once the novelty has worn off they usually attract fewer shoppers than does the traditional downtown shopping district.

(B) Most of the money spent in a large shopping mall is spent by tourists who are drawn specifically by the mall and who would not have visited the community had that mall not been built.

(C) Most of the jobs created by large shopping malls are filled by people who recently moved to the community and who would not have moved had there been no job offer in the community.

(D) Most of the money spent in a large shopping mall is money that would have been spent elsewhere in the same community had that mall not been built.

(E) Most of the jobs created by the construction of a large shopping mall are temporary, and most of the permanent jobs created are low paying.

Source:   LSAT  
Difficulty Level:   700

KarishmaB · Accepted Answer

A large amount of economic activity goes on in malls when they are opened. 
Yet the increase in the local economy is typically much smaller than the total amount of economic activity that goes on in the mall.

This is a paradox, right? A new mall has a lot of economic activity but overall the local economy does not show this increased activity. The new activity should add to the previous activity and show the same increase in the economic activities of the local economy.

(A) When large shopping malls are new they attract a lot of shoppers but once the novelty has worn off they usually attract fewer shoppers than does the traditional downtown shopping district.

We are talking about the case of newly opened malls. What happens later is irrelevant.

(B) Most of the money spent in a large shopping mall is spent by tourists who are drawn specifically by the mall and who would not have visited the community had that mall not been built.

This says that the mall brings in new economic activity. This should increase the overall local economy's activity too. It doesn't explain the paradox.

(C) Most of the jobs created by large shopping malls are filled by people who recently moved to the community and who would not have moved had there been no job offer in the community.

More people coming in to get more jobs would mean more economic activity. This should show in the local economy's activity too.

(D) Most of the money spent in a large shopping mall is money that would have been spent elsewhere in the same community had that mall not been built.

This tells us that the economic activity of the mall was just the economic activity that was happening elsewhere in the same community before. So if people were buying clothes from the local store before, now they are buying from the mall and not from the local store. So overall, the economy may not have seen a big increase in the activity because if activity increased in the mall, it reduced in local shops. This explains the paradox.

(E) Most of the jobs created by the construction of a large shopping mall are temporary, and most of the permanent jobs created are low paying.

Construction of the mall is irrelevant to the argument.

Answer (D)

broall · Answer

If a large shopping mall is operated, it is expected that the economic activity that goes on in that mall will contribute to the local economy. However, the increase in the local economy doesn't equal to the total amount of economic activity in that mall. Thus, there must be an amount of economic activity in that mall isn't created for new, it is taken from elsewhere. D conveys this well.

AkashM · Answer

Hi Andrew  MentorTutoring ,

Need your help.

From what I understand, the stem says,

Expectation: Local economy will also flourish along with the mall. 
Reality: Local economy does not flourish as expected (but there is some increase in activity)

Option D, which is the OA, states that money that would have been spent in the local economy is now spent in the mall. It seems to me if that were the case, then local economy would be taking a hit. But in the stem its mentioned that there is some increase in local economic, so I don't understand how can this option resolve the paradox.

Where as option B tells us why there is good amount of economic activity in the mall but not in the local economy. Although it does not mention anything about the little increase seen in the local economy as mentioned in the stem, it does not imply there has been a reduction.

I am not able to understand where am I going wrong! Could you share your thoughts on this.

Regards, 
Akash

AndrewN · Answer

Hello, Akash. As LSAT questions go, this one is about as GMAT™-friendly as could be. I took about a minute and a half to settle on (D). The discrepancy is between  expectations  that the local economy will see a certain increase once a  large shopping mall  opens in the area and the  reality  that such an increase to the local economy  is typically much smaller than the total amount of economic activity that goes on in the mall . If the businesses in the mall were taking away potential sales from local businesses outside the mall, then the discrepancy would be resolved, and this is exactly the picture that (D) paints. To piggyback off of choice (B), let us say that the area in which the mall is built generates most of its annual revenue from tourism. If these tourists used to visit and spend money in the town, but many of them now spend money in the mall instead, then the mall economy might flourish while the economy of the town might underperform. Note that a  much smaller  increase could or could not refer to a decrease. Perhaps, too, the tourists are actually spending more money on the whole than they used to, since they have more choices, but since a lot of that money might still be spent in the mall, the larger community might make just marginal gains. Any of a number of possibilities exist, but (D) presents a valid way for that to happen. Meanwhile, choice (B) only indicates that the mall has attracted more tourists to the area. We know that the majority of mall revenue comes from this group, according to the answer choice, but it could also be true that since the tourists are now visiting an area in which they had not taken any interest before, they are spending some of their money outside the mall, too. (I doubt the mall sells gasoline, for example; a local business might benefit from the influx of even dedicated mall tourists.) All other things being equal, we would expect the local economy to benefit in proportion to the number of new tourists (plus old ones) flocking to the area.

It is not that I cannot see your point with (B). It is an alluring option, even if my experience allowed me to write it off immediately. What it comes down to is that it lacks the seesaw (give-and-take) relationship outlined in (D) between the local economy and the mall economy. Choice (B) is one-sided, since the local community was apparently not benefiting in the first place from these tourists.

I hope that helps. If you have further questions, feel free to ask. My best advice with these sorts of questions is to follow the linear logic of the passage and question stem. The more you conjure up to justify an answer, the less likely it is to be correct. And of course, practice more questions and look for patterns.

- Andrew

VerbalBot · Answer

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When a community opens a large shopping mall, it often expects

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